Know your zoning (or lose your boodle…)

Sellers could be losing 30% or more of the value of their property when they sell, by simply not being aware of the development potential of their property due to their zoning.

Cape Town estate agent Andre de Villiers said he was shocked to hear of a sale recently, where elderly sellers had accepted a "rather modest offer" directly from a private buyer, a property developer, where it can only be concluded that the seller was probably unaware of the property's valuable GR4 zoning.

"Sellers should remember that an estate agent who is a true specialist in an area, can provide the property owner with a lot more than just a current market valuation that is based on recent sales," said de Villiers.

"The agent can provide you with comprehensive information that will impact on a property's value including the potential for further development.  My agents are required to keep totally up to date with both market and municipal trends as well as local regulations for the area. We can also provide property owners with a free report on their zoning, and what this zoning means.  Even if you are a private seller or have a private buyer interested in your property, it is still highly recommended that you protect your interests by asking an agent to give you a well-motivated valuation," said de Villiers.

Nobody doubts that that an extra room or a garage adds a tangible value to a property, but the fact that the owner could actually build a block of flats on their property could be far more important to the inherent value of the existing property. This is often information that a property owner simply does not know.

Portals Rise In Popularity

buyerinspection– Andre de Villiers

With every sale we do our best to establish the source of the buyer and the source of the seller. Such research is a vital part of running any successful and growing business and in the rapidly evolving world of real estate, we are no different and detecting trends is a critical part of both budget and strategic planning.

Having just concluded a survey of 2013 sales the biggest trend I have identified is the substantial increase in the use of property portals by buyers, over the use of Corporate websites. Of the portals, Property24 is for our areas clearly the outright preferred portal. Fewer buyers seem to be interested in what any individual company website has to offer with a clear preference to go to the shared portal sites.  It seems that at least 50% of the value in the Corporate website is now for purposes of positioning on Google and other search engines, for those buyers who don't know about the property portals. *

Of the buyers surveyed on their buying process significantly all except 11% had used the internet as part of their search to find a property to buy. Of these 72% remember using the portal Property24.  Only 33% mentioned any other property portal (this was mostly PrivateProperty followed by IOL and Tivvit) and even more interesting to me, only a 27% could recall using any individual company's website.  I would very much like the Western Cape Institute of Estate Agents to undertake a regional survey to establish these trends, and have communicated such request to them as I don't believe that the portals themselves can really be expected to provide independent commentary on this.  

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Many Sectional Title Owners Irresponsible

As Sectional Title specialists in Cape Town Southern Suburbs, with a dedicated Sectional Title team managed by Ranate Boni, ( ) but we are frankly alarmed at the increasing number of poorly managed blocks in our franchise

It is typical that in these complexes owners seldom attend meetings and hold an opinion that someone else will worry about their investment.  This is a dangerous game, as a result is we are seeing more and more blocks where the managing agents are unmotivated with owners that are disinterested, trustees are reluctant and the Chairperson of Body Corporate is doing a thankless task and suffering high levels of 'demotivation'.

When the rot sets in, a process of events can result in a significant loss of value in your property and in extreme cases you may find yourself sitting with an investment that has become a liability where the only tenant you can get fits a high risk profile as more desirable tenants move out the block.  The sectional title complex can become one where most professional agents will not ‘touch it with a barge pole’ let alone a For Sale board with their company logo on it!  

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It’s Time to Take Commission Out the Closet!


I have wanted to write this article for a while!  It’s a topic few agents want to discuss with clients but it’s a discussion that every seller and his agent should have. By doing so everyone will be better off and it will raise professional standards of practice and I believe this discussion will be in the interests of professional agents.

South Africans clearly prefer to use estate agents as a proven and effective way to sell their property.  Paying a commission for such real estate services is widely accepted.  Alternative structures that offer sellers a ‘DIY option’ come and go.  In fact the only consistent thing about fee based alternatives to commission is that they fail to meet most sellers’ needs, result in a lot of frustration and usually an agent has to step in and get the house sold in any event!  If the ‘sell yourself’ options were good idea in practice, as opposed to theory, at least some of them would have survived the usual fanfare launch and made a national impact in the 28 years I have been in property and none have!

So based on the logical assumption then that South Africans are happy to pay commission based fees to get their house sold, the real issue I want to ‘drag out the closet’ is what an appropriate commission would be and how it should be determined.

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Bad Agent? Sellers Have Themselves to Blame!


It is more than annoying to professional estate agents that many people choose their agent for the totally wrong reason.  This could be because it is a friend or family member or because the decision based on other emotional decisions like an unsubstantiated valuation designed to appeal to the owner’s ego rather than the reality of the current market.

Let’s look at the real reasons why a property sells.  To make my point I will divide these reasons into three groups:

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Minimise Your Risk as a Buyer


Over the years I have heard many ideas about how a buyer could protect his interests when purchasing a property.  These ideas vary considerably in their practicality.  

Of course prevention is better than cure, so a thorough inspection of the property is the first and somewhat obvious recommendation. More often than not however due to the emotion of the purchase process, and the fear of loss by the buyer who wants a quick decision to his offer being accepted, a thorough inspection is NOT actually done.  This is the case more often than one may rationally assume.  

If it was not totally impractical the ideal would be to 'try before you buy' but sellers are seldom looking for tenants so this is not going to be an acceptable proposal in 99% of cases, if not more.  I certainly would not even think of recommending such a request to a seller, but there are a number of other more practical solutions that can be considered and that a professional agent could facilitate.

The recommended course of action would depend on the particular property and the circumstances, so I have four scenarios to which I propose four different solutions;

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Turn a Grudge Purchase into a Valuable Sales Asset


With nearly 30 years in real estate if anyone asks me what the most irritating aspect of a sales is, I have no hesitation in answering that it is getting the various Certificates of Compliance for 'amenities health and safety' that are required.  

In 1984 when I started as a rookie agent the only required inspection was for notifiable beetle (which by the way was at that time just two specific little creatures) but then these reports started to be expanded to include another insect or two until it was recommended that the wording in the contract all types of wood destroying 'goggas', many of which didn't even live in the Cape. Then of course came the 'bright spark,' to add electrical compliance certificates and now we have every trade jumping on the bandwagon so we have the need for the seller to also provide plumbing certificates, gas inspection reports and electrical fencing inspections.  In South Africa we have as much certification requirements as Switzerland yet the majority of the country lives in shacks – but be that as it may – that's South Africa.  Of course I appreciate that the buyer of a property has a right to know what they are buying, however when you are buying a second hand home (yes we don't like to call it that but this is what it is), in many instances is a "mature property" and the buyer in making an offer needs to accept that in his offer price.  I not only have my doubts about how reasonable such requirements are, I also have over the years seen far too many things that make me very skeptical about the real value of these reports let alone the ethical behaviour surrounding them.  And these reports are not over yet! There are moves afoot to have Energy Performance Certificates apply to resale properties and not only new homes. 

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Winter of content!


Winter 2013 was certainly freezing but June July and August have certainly been 'a winter of content' compared to all years since 2008 when property went into meltdown!  Indeed we doubled sales this year compared to what was done in Winter 2009 or winter 2010 and I am well aware that we have a busy week ahead.  With two sales reported today I am confident that we will go into Spring on steroids if we can get the stock that is! 

June 2013 an all time Devler (June) record!


In Cape Town real estate we do not expect too much from winter months, but June 2013 has been a record.

June 2013 has been the second best month of the year so far, but it is the best June since we started trading as Chas Everitt or even prior to that, as ERA Steer.

My congratulations to a fired up team of both sales agents and of course our star administrative support. Really proud of your exceptional achievements!

It has been a long time since we have seen a lengthy period of good news in real estate – but now after six outstanding months – we can surely say that the property market has well and truly recovered!  We are also seeing the return of activity at the top end of the market and all this despite the banks keeping the most stringent lending criteria in place.